The Commons

Zipcar and Flexcar started an economic revolution in urbanized America. But how much are we willing to share?

In the late 1990s, when Robin Chase and her co-founders started testing names for what would become the car-sharing network Zipcar, they quickly learned to avoid the word "sharing." "Every one that had the word 'share' in it," she says, "about 40 percent of the people hated. They thought, 'It's going to be dirty -- crummy -- like the 1960s, and I'm going to have to wait.' Imagine if hotels were called bed-sharing."

If Chase found users reluctant to embrace the concept of sharing, it might have been because hers was one of the first businesses to try it. To sell the Zipcar idea, the company highlighted its convenience: Rather than check out with an agent, customers reserve a car online for however long they need it. Rentals can be as short as an hour. The cars are parked in public lots, and users unlock the vehicles by waving their membership card over an electronic reader behind the windshield. The ignition keys and a gas card are inside. When done, customers wave their card over the reader again, which is how the company knows the car has been returned on time.

For Chase, a mother of three living in Cambridge, Massachusetts, this was as much a personal need as a business idea. She was among a generation of college graduates who didn't flee to the suburbs when they got married and had children. In the 1990s, urban-revitalization projects encouraged middle-class families to live in downtown neighborhoods. That meant consumption patterns were ripe for change. In a cramped city, space is expensive and rare, especially when it comes to owning a car.

Unlike traditional car-rental companies, Zipcar relies on members to be neat, honest, and punctual. Fees are charged for late returns, but Zipcar also appeals to users' sense of obligation to one another. It borrows some elements of what any type of sharing requires -- that we understand others need to use the good, too -- and translates them into a capitalist enterprise. People have responded. After 2003, when Chase left the company, Zipcar began expanding rapidly. About four years ago, Zipcar swallowed its closest competitor, Flexcar, and now it's in 102 locations. Revenues went from $2 million in 2003 to more than $186 million in 2010. Nearly every major rental-car company is jumping in with a Zipcar-like program.

Zipcar is the most successful example of a new type of sharing that has exploded in the past decade. Five U.S. cities now have similar services with bikes. By September 2010, when Washington, D.C., began its city-run Capital Bikeshare program, the largest of its kind in the country, potential customers reacted enthusiastically to the notion of sharing. "Since Zipcar and Flexcar, it's a pretty easy step to bike-sharing," says Chris Holben, Capital Bikeshare's project manager. In focus groups, a host of names were floated, and people liked the one with "share" in the title. Holben also says that names like WeBike tested better than names like UBike: "Most people seemed to like the more inclusive name."

Go online today and you'll find even more sharing. Chase's new venture, Buzzcar, uses a social network that allows car owners to rent out their private vehicles for a short period of time. Airbnb and Couchsurfing.org let users stay in other users' apartments, and the terms of the transactions are negotiated informally between the two parties; users vouch for each other through online networks. In many cities, groups of businesses or residences pay for wireless Internet networks that are free to anyone within range. People swap old clothes and old books online. New mothers even share breast milk.

All of these services draw on the notion of sharing, but they vary greatly. Zipcar and Airbnb look a lot like traditional rental businesses but are less formal, while others are digitalized versions of an old-fashioned yard sale. Still others involve giving away items for free. They all, though, change our idea of ownership. Instead of buying a car or bike, we can belong to a network that allows us to rent one almost whenever we want. We can open up our homes. When we're finished using a good, we can increase its value by sharing it with others, and we're often happy to do so free of charge.

There are a number of names for this: the empathy economy, distributed capitalism, collaborative consumption and its counterpart, collaborative production. Yochai Benkler, a professor at Harvard Law School who has written two books on the subject, calls this type of economic model the social market, because it draws upon the obligations we feel to one another. The incentives to join and share go beyond monetary compensation.

Increased urbanization worked in tandem with other cultural shifts to trigger this phenomenon. Growing awareness of global climate change makes activities like driving a car every day less socially desirable. This coincided with new attitudes in Western countries that emphasized quality-of-life choices over the acquisition of material assets. The movement of young, well-educated adults back to cities doesn't just mean they lack the space to buy a car; it also means they're accustomed to sharing space. Most important, the rise of the Internet lowered transaction costs and created a new brand of community building.

The idea of communal property was built into the Internet itself. The programs that make our online lives possible -- like Apache and Linux -- were created through a system of collaborative production, brought together by uncompensated volunteers around the world. The first services to take advantage of the sharing ethos allowed users to swap music and movies, and now both legal and illegal sites have picked up where programs like Napster left off. Social networks created a new kind of wealth. In the past, we might have shown off by buying a new car, but today we show off on Facebook. "We have a new way of attaining status that doesn't have to do with assets," Chase says. "How many friends do I have? How many people are tweeting or commenting about me? What is my score on World of Warcraft?"

Not that we're suddenly willing to share everything. The idea breaks down somewhere along what Benkler describes as a conceptual continuum between oranges and apples. "Apples are harder to share than oranges. They require a little more intimacy or physical capability with a knife," he says. "Oranges just beg to be shared." Benkler believes that whether home-sharing services like Airbnb survive will test how far we're willing to go.

For some customers, the idea of sharing space and meeting new people is the biggest draw for joining these sites. When Ron Zucker, a 46-year-old who works in food policy in D.C., and his wife planned a trip to New York in December 2009, they decided to forgo traditional hotels and use Airbnb for the first time. Zucker found an apartment he liked near Times Square, but the regular tenant would be in town during the couple's planned trip. They decided to be roommates for the weekend.

Zucker lucked out. "My wife walked in, and the guy had this huge, hand-drawn image of Buddy Rich up on the wall, and she looked up and said, 'My husband is going to love you.'" Zucker had worked as a jazz drummer for four years. When he signed up for Airbnb, he hadn't expected to make a new friend who would share his love for one of the world's most famous jazz drummers. When the couple visited New York a second time, they wanted to stay with the same person, but his spare bedroom was taken. Instead, he offered to sleep on the couch so they could have his bed. (These types of interactions are more common with Couchsurfing, a nonprofit network of people in 230 countries who let guests sleep on their couch for a night for free.)

Other, more cautious Airbnb users can sublet their apartments when they're away without meeting their temporary tenants and leave parts of their apartment locked. There are good reasons not to share. Airbnb recently suffered a spate of bad press when a couple of San Francisco users described how their apartments were burglarized and vandalized. A woman who blogs as "EJ" said of the incident: "They smashed a hole through a locked closet door, and found the passport, cash, credit card, and grandmother's jewelry I had hidden inside. They took my camera, my iPod, an old laptop, and my external backup drive filled with photos, journals ... my entire life." Airbnb at first didn't offer to compensate for the damages; now, though, it has an insurance policy, operates a 24-hour helpline, and requires verifiable identifying information when users sign up. The company also issued a mea culpa and sent all of its users an e-mail explaining its new policies, which satisfied Zucker. "I think they were probably a little bit naive," he says.

For Benkler, the rise and persistence of all of these services just shows that the social market is fundamental to human nature. Its existence is only surprising because economists have done such a good job of convincing us that people need top-down control systems, as in state-run communist economies, or market incentives like raises or bonuses, to work for the benefit of a larger group. "They said everything could be understood through rational self-interest," he says, but it isn't true. "We are more like how we tell our kids to be on the playground than what the economists say."